Knowledge that Transforms

The authors quantify the relative importance of beliefs-based suspense and surprise measures in the entertainment preferences of viewers of Twitch, the largest online video game streaming platform. Using detailed viewership and game statistics data from broadcasts of tournaments of a popular video game, Counter-Strike: Global Offensive, the authors compute measures of suspense and surprise for a rational viewer. They then develop and estimate a stylized utility model that underlies viewers’ decisions to both join and leave a game stream. The method used enables the authors to causally identify the direct effect of suspense and surprise on viewers’ utilities, separating it from other sources of entertainment value (e.g., team skill) and from indirect/supply-side effects (e.g., word of mouth, advertising). The authors show that suspense enters a viewer's utility but find little evidence of the effect of surprise. The magnitudes imply that a one-standard-deviation increase in round-level suspense decreases the probability of leaving a stream by .27 percentage points. The authors find no detectable effect of suspense and surprise on the decision to join a stream, ruling out indirect effects. Variation in suspense levels explains 9.2% of the observed range of the evolution of a stream's viewership. The authors use these estimates to evaluate counterfactual game and platform designs. They show that historical updates to Counter-Strike: Global Offensive game rules have increased tournament viewership by 4.1%, that rules can be further modified to increase viewership, and that alternative platform designs that inform joining users of games’ scores will additionally increase overall viewership by 1.3%. Together, these results illustrate the value of the authors’ method as a general tool that content producers and platforms can use to evaluate and design media products.

With representation issues in Hollywood coming under intense scrutiny, the movie industry is wrestling with gender- and race-related imbalances in its power structure. One area of concern is the small proportion of women and people of color retained as film directors, coupled with little evidence of improvement in representation among widely released U.S. movies over time. In this study, the authors examine factors that explain gender- and race-related performance disparities in the movie industry. They estimate a two-stage model that accounts for the effects of selection in matching director gender and race to (1) projects of varying potential, (2) production budgets, and (3) the number of screens secured during distribution. They use instrumental variables for revenue, budget, screens, and audience reviews and find that once endogeneity and selection are captured by the models, gender- and race-based performance differences disappear. The results show evidence of biases favoring male, nonminority directors in project assignment, budgeting, and distribution. These biases are stronger for movies with female and minority lead actors but weaker for directors with high clout and for international directors. A matched-sample analysis illustrates that women directors produce similar outcomes with lower budgets and that minority directors produce outsized revenues with equivalent budgets.

Time scarcity promotions (e.g., “40% off for a limited time”) are mainstays of online retail marketing. Although positive effects of time scarcity promotions on consumer interest have been evidenced in the brick-and-mortar world, should retailers expect similarly robust effects online? The present research suggests the answer may be no. First, the authors report meta-analytic and experimental results suggesting that previously identified positive effects of time scarcity promotions observed offline may not emerge in online shopping contexts. Then, consistent with the prediction that online time scarcity promotions activate more persuasion knowledge than identical control promotions, the authors detail findings suggesting that providing retailer-exogeneous justifications for online time scarcity promotions’ time restriction (e.g., consumers’ birthdays, seasonal changes) can increase the potential of observing positive effects on consumer interest online. Further, results suggest that the positive effects of including exogenous time justification may be more likely when less time remains until the online promotion’s expiration. However, results stop short of suggesting that online time scarcity promotions will consistently yield superior outcomes compared with identical online control promotions. Therefore, the authors highlight the continued need for careful managerial use as well as further research examining the optimal translation of offline tactics to online retail.

Artificial intelligence (AI) is pervading the government and transforming how public services are provided to consumers across policy areas spanning allocation of government benefits, law enforcement, risk monitoring, and the provision of services. Despite technological improvements, AI systems are fallible and may err. How do consumers respond when learning of AI failures? In 13 preregistered studies (N = 3,724) across a range of policy areas, the authors show that algorithmic failures are generalized more broadly than human failures. This effect is termed “algorithmic transference” as it is an inferential process that generalizes (i.e., transfers) information about one member of a group to another member of that same group. Rather than reflecting generalized algorithm aversion, algorithmic transference is rooted in social categorization: it stems from how people perceive a group of AI systems versus a group of humans. Because AI systems are perceived as more homogeneous than people, failure information about one AI algorithm is transferred to another algorithm to a greater extent than failure information about a person is transferred to another person. Capturing AI's impact on consumers and societies, these results show how the premature or mismanaged deployment of faulty AI technologies may undermine the very institutions that AI systems are meant to modernize.

Sentiment analysis has fundamentally changed marketers’ ability to assess consumer opinion. Indeed, the measurement of attitudes via natural language has influenced how marketing is practiced on a day-to-day basis. Yet recent findings suggest that sentiment analysis's current emphasis on measuring valence (i.e., positivity or negativity) can produce incomplete, inaccurate, and even misleading insights. Conceptually, the current work challenges sentiment analysis to move beyond valence. The authors identify the certainty or confidence of consumers’ sentiment as a particularly potent facet to assess. Empirically, they develop a new computational measure of certainty in language—the Certainty Lexicon—and validate its use with sentiment analysis. To construct and validate this measure, the authors use text from 11.6 million people who generated billions of words, millions of online reviews, and hundreds of thousands of entries in an online prediction market. Across social media data sets, in-lab experiments, and online reviews, the authors find that the Certainty Lexicon is more comprehensive, generalizable, and accurate in its measurement compared with other tools. The authors also demonstrate the value of measuring sentiment certainty for marketers: certainty predicted the real-world success of commercials where traditional sentiment analysis did not. The Certainty Lexicon is available at www.CertaintyLexicon.com .

Bridging the gap between the mental accounting and identities/roles literatures, the present research examines how the extent to which an individual's life roles (e.g., “employee,” “spouse”) are integrated (i.e., have more flexible and permeable psychological boundaries between them) moderates the fungibility of mentally accounted funds. Specifically, individuals with more integrated roles are more able to circumvent the constraints typically imposed by mental budgeting and earmarking; therefore, they are more likely to use funds that are allocated or budgeted for the purposes of one role to service the needs/wants of another role. This holds regardless of whether funds have been (1) allocated to a broader role-specific mental account for future expenditures or (2) earmarked for a specific purchase. The authors find evidence that the effect of role integration arises because those with more integrated roles believe that making purchases for one role using funds allocated or budgeted for the other role is more justifiable.

Manufacturers and retailers often advance sell seasonal products or services (e.g., holiday decorations, summer or winter entertainment). The authors examine advance selling in marketing channels to offer several insights. First, it is well established that a decentralized channel suffers from the issue of double marginalization; that is, the manufacturer and retailer both add positive margins when setting their prices, which results in inefficiently high retail prices. The authors find that, under a dynamic wholesale-price contract, advance selling can alleviate this double-marginalization problem and benefit the manufacturer, the retailer, and consumers. Second, the benefit of advance selling diminishes with the product's holding cost, the retailer's stockpiling ability, and the manufacturer's commitment to spot wholesale price. Third, with wholesale-price commitment, advance selling benefits the manufacturer and consumers but hurts the retailer; the manufacturer is better off making a price commitment only when its product's holding cost is sufficiently low and worse off otherwise. Last, the retailer's stockpiling ability decreases its own profit under a dynamic contract but increases it under a commitment contract.

One of the most dramatic shifts in recent years has been consumers’ increased use of smartphones for making purchases and choices—but does using a smartphone influence what consumers choose? This article shows that, compared with using a personal computer (PC), making choices using a personal smartphone leads consumers to prefer more unique options. The authors theorize that because smartphones are considerably more personal and private than PCs, using them activates intimate self-knowledge and increases private self-focus, shifting attention toward individuating personal preferences, feelings, and inner states. Consequently, making choices using a personal smartphone, compared with a PC, tends to increase the preference for unique and self-expressive options. Six experiments and several replications examine the effects of personal smartphone use on the preference for unique options and test the underlying role of private self-focus. The findings have important implications for theories of self-focus, uniqueness seeking, and technology’s impact on consumers, as well as tangible implications for many online vendors, brands, and researchers who use mobile devices to interact with their respective audiences.

The current research advances understanding of how consumers respond to embarrassing service encounters. Across a combination of field and online studies, the authors provide evidence that (1) consumers prefer self-service to human services when purchasing embarrassing products or services; (2) when self-service is not available, consumers respond more positively to a mechanistic service provider than to a personable service provider; and (3) if consumers must engage in embarrassing social interactions, they dehumanize service providers, perceiving them as more mechanistic and less capable of emotional reactions than when engaging in nonembarrassing service interactions. The authors also examine consumers’ familiarity with the service provider as a boundary condition for the effect. Collectively, the results provide converging evidence for the proposed framework and have substantive implications for service management.

This research examines when and how the speed of video ads influences consumers’ perceptions of luxuriousness and their subsequent behaviors toward products or brands featured in the ads. Across 12 experiments (total N = 27,227, five preregistered), the authors demonstrate that when a video ad depicts a product in slow motion (vs. regular speed), consumers perceive the featured product or brand as more luxurious. The effect emerges across various product categories (chocolate, shampoo, mineral water, wine) and in different countries (United States, United Kingdom, France). Tests of mediation and moderation suggest that the effect occurs because viewing a slow-motion ad increases feelings of immersion, which lead consumers to expect greater hedonic value from the featured product and thus view it as more luxurious. Consistent with this account, the effect weakens when video blurriness or buffering impairs the immersive viewing experience afforded by slow motion, and the effect attenuates among consumers who are very weakly or very strongly predisposed to experience immersion. Finally, by enhancing perceptions of luxuriousness, slow motion subsequently boosts consumers’ desire for the featured product or brand (as manifested by higher willingness to pay, purchase intentions, and ad click rates), particularly when the goal to consume luxury is salient (vs. not).